Stimulus will provide $22M to stabilize Long Beach housing market

The City of Long Beach has been awarded a highly competitive $22 million federal Stimulus grant to help stabilize high foreclosure areas, combat declining housing values, promote home-ownership and create jobs.

The City will form a consortium with Habitat for Humanity and establish financing and energy efficient rehabilitation for 86 workforce households to purchase and redevelop foreclosed-upon homes. Habitat for Humanity will purchase and rehabilitate 25 homes that have been abandoned or foreclosed upon in order to sell, rent, or redevelop these properties.

“Vacant homes often lead to reduced property values, blight and neighborhood decay,” Mayor Bob Foster said. “This important investment will help revitalize parts of Long Beach that have been hit hard by the housing crisis and will benefit the entire City by stabilizing neighborhoods, improve homeownership and promote community pride.”

Neighborhood Stabilization Program funds can be used to establish financing mechanisms for the purchase and redevelopment of foreclosed residential properties, to purchase and rehabilitate residential properties, to establish land banks for foreclosed homes, and to redevelop demolished or vacant properties.

The City of Long Beach received every dollar it requested, and was one of only 12 awardees in the State of California. With the $22,249,980 in funding announced today, the City of Long Beach and its partners have secured $113,542,640 in Stimulus funding to date. The funding announced today will be provided via the U.S. Housing and Urban Development’s Neighborhood Stabilization Program (NSP2), to spur economic development in hard-hit communities. The program will be administered locally by the Community Development Department.

“With the many challenges that families have faced both as a result of the recent recession and, in many cases, long-term local economic issues, the ability for them to keep their homes despite financial difficulties has become a serious problem in a lot of communities, including many in the 37th District,” Congresswoman Laura Richardson said. “In addition to helping individual families, this funding will also be used to revitalize neighborhoods by rehabilitating old structures, infilling vacant lots and bringing new occupants to empty homes. This program will remove the blight, which is an unfortunate consequence to communities of these very difficult times.”

NSP2 will benefit first-time homebuyers who qualify for a mortgage and whose income is at or below 120 percent of area median income. Habitat for Humanity will utilize 25 percent of the funding for households at or below 50 percent of area median income for its programs.

The program will require housing counseling for families receiving homebuyer assistance funds through NSP2. In addition, it will protect homebuyers by requiring grantees to ensure that new homebuyers under this program obtain a mortgage from a lender who agrees to comply with sound lending practices.

NSP2 grants being awarded nationally today will build on the work being done now to help state and local governments and non-profit developers collaborate to acquire land and property; rehabilitate abandoned properties; and offer down-payment and closing cost assistance to low- to middle-income homebuyers.

Comments

Making housing more expensive is supposed to ENCOURAGE home ownership? Instead of using tax money to refurbish these homes, we should let their prices go down and allow private investors to buy them up and remodel them. Then they can be rented out at lower prices without spending money the government already doesn’t have.